Department stores are off to a rough start this earnings season.
JCPenney today joined competitor Kohl’s Corp. in releasing disappointing first-quarter results that sent its shares tumbling before market open. At the opening bell, they were in the red more than 8% to $1.06.
The beleaguered Plano, Texas-based retailer — which has struggled with C-suite turnover, distressed stock and waning relevance — said today its Q1 sales fell 5.6 % to $2.44 billion, missing the $2.56 billion market watchers had anticipated. Comparable sales, meanwhile, tumbled 5.5% during the period. JCPenney also widened its adjusted net losses to $147 million, or 46 cents per share, which was worse than the 38-cent loss analysts predicted.
Despite the disappointing results, CEO Jane Soltau — who joined the company in October — said she is pleased with the strides the firm has made “in setting key objectives, building our senior leadership team, executing significant changes in our assortment, such as eliminating major appliances, and mobilizing the entire organization around our priorities.”
Since taking the helm, Soltau has initiated a turnaround strategy that has seen the company ditch a few dozen underperforming stores and bring in new talent from retailers such as Target and Michaels. In January, it also announced the hiring of a chief transformation officer specifically tasked with developing the company’s strategic initiatives aimed at overhauling the 116-year-old business. In tandem with today’s results, the company announced the hiring of a chief customer officer, Shawn Gensch, who previously held that role at Sprouts Farmers Market.
“Retail is a dynamic business with many touch points that together lead back to the customer experience,” Soltau said. “We are working to reestablish the fundamentals of retail at JCPenney, and at the same time, we are building capabilities to satisfy the wants and expectations of our customers. In everything we do, we are putting the customer at the center.”
She added that she plans to make “sound, strategic decisions backed by data” as she looks to map out a long-term strategy for the company and “build a talented and accomplished team of retail experts.”
Kohl’s — which has found more favor with Wall Street lately, thanks to its forward-thinking brick-and-mortar strategy and newly expanded Amazon partnership — also disappointed investors today when its earnings missed the mark. Its shares dipped more than 10% ahead of market open.
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